Let’s say you have a loss in your business for the year. Can you get a tax refund for that loss? Getting some benefit from your business loss depends on the legal type of business you own and whether your investment in the business is “at risk” in whole or in part. It also depends on whether you have other income.
Business Losses for Corporations
Owners of a corporation are not taxed directly on business profits and losses because the corporation’s taxes are separate from those of the business owners. The owners of a corporation are shareholders ; they are taxed on distributions (dividends). No dividends, no taxes due.
Business Losses for Pass-through Entities
As discussed above, for some types of read more…